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DAX Analysis – 23rd May 2025

Strong momentum returning. Bias flips bullish above 24,050.

It’s the end of the week and we’re heading into Friday with some renewed optimism in the market. After three days of intraday weakness and failed upside momentum, the DAX has staged a sharp rebound off key support. Traders are now facing the question: is this just another bounce, or the start of something more directional?

Let’s unpack what’s driving the market and the technical outlook going into today’s session.

📉 Market Recap – Thursday, May 22nd

Yesterday’s DAX session opened with mild weakness, but reversed sharply mid-morning after strong German business sentiment data boosted local risk appetite. This was followed by a second wave of buying into the U.S. open, aided by softer-than-expected U.S. jobless claims and stable bond yields.

🔑 Key Drivers:

  • 🇩🇪 IFO Business Climate surprised to the upside at 91.2 vs 90.5 expected, its best reading in 10 months. Hopes of a Q3 economic reacceleration are rising.
  • 🇺🇸 U.S. Initial Jobless Claims came in at 217K vs 220K expected, suggesting a still-resilient labor market, but not hot enough to derail Fed pause expectations.
  • 🇪🇺 Euro remains stable, offering no drag from currency strength.

🔺 Net Result:
The DAX reversed from intraday lows near 23,880 and launched a 270-point rally, closing back above 24,100. This key level is now in play again as traders reassess near-term direction.

📅 Economic Calendar – Friday, May 23rd

Today is quieter on the data front, but with markets freshly recalibrated, technical levels are likely to dictate flows.

Events to Watch:

  • 🇬🇧 UK Retail Sales (08:00 CET) – Possible indirect sentiment driver for European equities.
  • No major EU/US data scheduled today – flows may be driven more by positioning and technicals into the weekly close.

📊 Technical Analysis – 23rd May 2025

📍 Chart 1: EMA Cross, RSI, Volume

  • EMAs (short-term): Bullish crossover of 5/9/20 EMAs confirmed above 24,100.
  • Volume: Strong uptick on reversal, confirming participation.
  • RSI: Currently at 61.6, trending higher but not yet overbought.
    👉 Signal: Strong momentum returning. Bias flips bullish above 24,050.

📍 Chart 2: Bollinger Bands & ATR

  • Bands expanding, price breaking upper band then reverting slightly = volatility surge.
  • ATR (21) has spiked to 20.88, a multi-session high.
    👉 Signal: Volatility breakout active. Dips may offer long entries if held above 24,000.

📍 Chart 3: MACD & ADX

  • MACD: Bullish crossover confirmed with strong green histogram growth.
  • ADX: Rises to 31.14, confirming trend strength has picked up.
    👉 Signal: Trend is turning up with confirmation from both momentum and strength metrics.

📍 Chart 4: Support & Resistance

  • Support: 23,984 (yesterday’s bounce zone).
  • Resistance: 24,149 → key to break for upside continuation.
    👉 Signal: 24,045–24,150 is critical resistance zone. Break = fresh longs. Hold = likely fade into close.

📍 Chart 5: 40 SMA with 15-period Shift

  • Price reclaimed shifted 40 SMA at 24,046 and is currently trading above it.
  • Candle color shift confirms return to bullish bias.
    👉 Signal: Medium-term trend regaining strength. Holds above 24,046 = bulls in control.

📍 Chart 6: Peak Reaction Zones

  • Upper Zone: 24,067–24,149 (active supply zone).
  • Lower Zone: 23,846–23,984 (strong demand, tested yesterday).
    👉 Signal: Price is ping-ponging between major zones. Clean break of upper zone = rally leg to 24,300+.

📍 Chart 7: Daily Pivot Points

  • Pivot: 23,994
  • R1: 24,141 → almost tested this morning
  • R2: 24,243
  • S1: 23,892
    👉 Signal: Price above pivot = bullish bias. Holding above R1 opens door to push toward R2.
24,045–24,150 is critical resistance zone. Break = fresh longs. Hold = likely fade into close.
24,045–24,150 is critical resistance zone. Break = fresh longs. Hold = likely fade into close.
Medium-term trend regaining strength. Holds above 24,046 = bulls in control.
Medium-term trend regaining strength. Holds above 24,046 = bulls in control.
Price is ping-ponging between major zones. Clean break of upper zone = rally leg to 24,300+.
Price is ping-ponging between major zones. Clean break of upper zone = rally leg to 24,300+.
Price above pivot = bullish bias. Holding above R1 opens door to push toward R2.
Price above pivot = bullish bias. Holding above R1 opens door to push toward R2.
Strong momentum returning. Bias flips bullish above 24,050.
Strong momentum returning. Bias flips bullish above 24,050.

Volatility breakout active. Dips may offer long entries if held above 24,000.
Volatility breakout active. Dips may offer long entries if held above 24,000.
Trend is turning up with confirmation from both momentum and strength metrics.
Trend is turning up with confirmation from both momentum and strength metrics.

🎯 Trading Signal – Bullish Breakout Setup

Setup: Buy on clean break and hold above 24,150

  • Entry: 24,155
  • Stop: 24,000 (155 pts risk)
  • Target: 24,620 (465 pts gain)
  • Reward/Risk: 3:1

📌 Rationale: Strong MACD/ADX trend confirmation, reclaim of 40 SMA, and momentum building into weekly close.

🧩 Summary – What’s Driving the DAX Today?

✅ IFO upside surprise reversed sentiment
✅ MACD, EMAs, RSI all signal bullish momentum resuming
✅ Volatility breakout suggests trend continuation
⚠️ Watch 24,149 as the final hurdle to unlock upside

🔍 Key Levels Today:

  • Resistance: 24,149 → breakout = target 24,243 then 24,300+
  • Support: 23,984 → below here flips bias bearish again
  • Pivot Bias: Bullish above 23,994

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